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ASSISTANCE TO STATE AGENCIES FOR INTRA-STATE MOVEMENT OF FOODGRAINS AND FPS DEALERS MARGIN UNDER NFSA:

Section 22(4) (d) of NFSA provides that "Central Government shall provide assistance to the State Governments to meet the expenditure incurred by it on intra-State movement, handling of foodgrains and margins paid to fair price shop dealers, for distribution of foodgrains allocated for the entitled persons and households”. Food security (Assistance to State Government Rules) 2015 was notified in 2015 to fulfil the above obligation of the Act. The scheme "Assistance to State agencies for intra-State movement of foodgrains and FPS dealers margin under NFSA” that emanates from the above provision of NFSA, provides assistance under three components namely (i) Intra-State transportation and handling of foodgrains (ii) FPS Dealers’ basic margin and (iii) Additional margin to FPS Dealers for sale through electronic point of sale devices (ePoS).

Provision for central assistance for intra-State movement of foodgrains and FPS dealers margin has been made for the first time under NFSA. Under erstwhile TPDS, State Governments were required to either meet this expenditure on their own or pass it on to beneficiaries (except AAY beneficiaries). This provision under NFSA aims to (i) Ensure availability of foodgrains to beneficiaries at fixed rates. (Rs.3/2/1 per kg for rice/wheat/coarse grains respectively) (ii) Reduce leakages and diversion of foodgrains by ensuring a reasonable income to the FPS dealers (iii) Facilitate availability of foodgrains in difficult areas through bearing some of the cost of intra-State transportation and distribution of foodgrains to these States at higher rates, with a higher level of Central Assistance than that provided to general category states.(iv) Encourage End-to-end Computerization of TPDS Operations through providing margins for e-PoS machines to promote computerization of supply chain management system.

Central assistance is provided as per approved norms with 50:50 cost sharing in respect of General category states while for North eastern/hilly/island states, 75% cost is borne by the Centre. The existing norms applicable since 2015 are given in Table 1 below.

Table 1: Norms of Central Assistance for intra-State movement of foodgrains and FPS dealers margin

Norms

Category of States and Union Territories

General

North-Eastern states, Himalayan states and the island states*

Norms of expenditure

(Rate in Rs per quintal)

Intra-State movement and handling

65

100

Fair Price Shop Dealers’ margin (basic)

70

143

Margin for sale through e-PoS devices

17

17

Central Share

(In percent)

50

75

* North-Eastern states, Himalayan states and the Island states include Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Andaman & Nicobar Island and Lakshdweep. General category states include all other States/UTs.

The budgetary outlays/actual expenditure under the scheme are tabulated in Table 2 below.

Table 2: Expenditure status

Scheme

Pattern of Central Assistance

2015-16

2016-17

2017-18

2018-19

2019-20

(BE)

Rs crore

Assistance to State agencies for intra-State movement of foodgrains and FPS dealers margin under NFSA

Currently

50%: General

75%: Special category

2.13

2500

4500

3883.94

4102.21

(262)*

* Expenditure upto July 31, 2019